PROFILE

We are committed to sustainability, transparency and accountability in all our business practices and relationships. This commitment to corporate social responsibility benefits all of AMB’s stakeholders as our customers gain from world-class real estate and our communities benefit from reduced environmental impacts.

We recognize our obligations to address economic needs as a business; and social and environmental concerns as a responsible member of the communities where we operate. We consider these obligations and opportunities at both a macro level, where they are factored into our strategic goals and efforts, and a micro level, where they are implemented in our day-to-day business activities.

In most markets, it is no longer feasible to operate or develop industrial buildings without addressing resource constraints related to land use, infrastructure, energy and water. Addressing these concerns in our operations and in development projects will be important to our continued success. We expect our sustainable properties will operate resource-efficiently for customers, and that our developments will remain welcome in communities where we operate. We believe our strategy remains particularly relevant, even in the current economic climate.

Our standards include the flexibility to respond to the evolving landscape of sustainability practices in the industrial real estate sector. As this landscape evolves in the coming years, we believe AMB’s company-wide commitment to sustainable business practices and the dedicated resources of our sustainability group position us to lead this change.

Our commitment to sustainable design, construction and operations is evident throughout our portfolio in the Americas, Europe, and Asia. Our sustainability efforts generated tangible success in 2008. We broke ground on more than 5 million square feet of sustainable development projects. Several projects received some of the highest possible ratings for sustainable buildings. These include Leadership in Energy and Environmental Design (LEED^®) Gold certification for AMB Morgan Business Center in Savannah, GA and an award for Redevelopment of the Year for AMB TriPoint Business Center in San Jose, CA. We also facilitated or funded more than 3.5 million square feet of energy retrofits within our operating portfolio. We expect our efforts to continue over the long term in spite of the current economic downturn. AMB is committed to sustainable business activities, industry-leading corporate governance, community engagement and charitable activities–commitments that have existed since AMB’s inception in 1983.

We expect to work with customers to educate them about the benefits of infill industrial real estate, including how it can positively impact supply chain efficiency, truck traffic and energy consumption. We also challenge our global teams to educate communities and municipalities about the land preservation and roadway congestion-reducing benefits of infill industrial real estate.

Another objective is to ensure that AMB’s sustainability initiatives continue to be refined and integrated into our broader Corporate Social Responsibility (CSR) efforts. We will continue to enhance AMB’s industry-leading corporate governance practices. We also expect to continue and expand our support for charitable organizations in our local communities.

Over the next three to five years, we expect sustainability to expand within our development business. We have invested in global best practices to ensure that we are developing the highest-quality and most sustainable buildings for each market. We expect to make significant strides toward improving the energy efficiency of our properties by facilitating improvements for our customers. Industry standards can make this process a challenge, but we believe it is an important opportunity to strengthen our customers’ businesses while also improving our own–while reducing environmental impacts. We also expect to continue our involvement in academic research partnerships and industry associations that improve the body of knowledge for sustainability in supply chains and industrial real estate.

AMB has long believed in the environmental benefits of an infill investment strategy, coupled with energy-efficient building standards across our global property portfolio. We actively work with our customers, employees and communities to achieve practices that address environmental concerns. We also strive to be a leader by sharing best practices across our industry.

AMB’s corporate headquarters, located in San Francisco, embodies our approach to sustainable development. In the late 1990s, well before LEED^® certification was commonplace, we completed the redevelopment of a dilapidated historic industrial pier located at the heart of the city’s waterfront, converting it into an efficient urban workspace. This project was one of the primary catalysts for the redevelopment of San Francisco’s waterfront. We can point to several design and building specifications within in it today that are widely considered best practices in “green” development.

Sustainability is also prominently featured in our long-standing strategy of investing in industrial distribution facilities in supply-constrained locations near seaports, airports and major highway interchanges. Our infill portfolio of distribution properties brings our customers closer to their customers, helping to reduce truck traffic, emissions and transportation costs. These reductions provide competitive advantage and cost savings for customers as well as environmental benefits for local communities.

Our 2008 CSR details the energy efficiency and sustainable building practices we are offering our customers. It also describes the culture we’ve built to develop future generations of AMB leadership. Our efforts are helping attract and retain the best and brightest talent across the globe, ensuring our long-term bench strength.

While we have been committed to sustainability long before it was fashionable, we believe our journey is just beginning; we are committed to a sustainable future and welcome your feedback.

Sincerely,

Hamid R. Moghadam
Chairman & Chief Executive Officer

We manage these impacts by first focusing our efforts on infill sites where we can improve underutilized land resources while reducing pressure to develop land elsewhere. These infill sites are often brownfields that have a legacy of negative environmental impacts, requiring remediation before AMB can develop or redevelop facilities there. We work to develop in accordance with recognized green building standards–LEED in the U.S., Comprehensive Assessment System for Building Environmental Efficiency (CASBEE) in Japan and others around the world. We pursue ways to improve resource efficiency for our customers. These measures benefit our stakeholders through efficient facilities that have reduced environmental and community impacts. Our efforts to address sustainability also position us to proactively respond to marketplace demands. We believe these are effective ways to manage risks related to the changing landscape of sustainability.

Short-term economic instability can obscure the long-term trend toward a resource-constrained future that requires more focused attention on sustainability, conservation and efficiency. Our focus on sustainability and energy efficiency presents an opportunity to increase value to stakeholders. We believe we are well-positioned to manage risks in the coming years. But certain risks will remain, and many are common to the entire commercial real estate industry, including exposure to:

• Informational risk from shareholders and capital providers’ inquiries about the aforementioned risks to our business
• Regulatory risk to the extent that buildings become subject to more stringent energy conservation regulations. This may include more restrictive requirements related to zoning, impact fees and environmental management.
• Legislative risk that carbon emissions reductions will be mandated for the commercial building sector, or other sectors that we rely upon to construct or operate our buildings.
• Energy and resource risk due to less reliability and higher prices for energy, water and waste disposal.
• Procurement risk due to less predictable access to, and higher prices for, construction materials.
• Climate change risk due to changing patterns of severe weather events.

Risk Category	Oganizational Strategy	Competitive Position	Quality Value Drivers	Quantitative Value Drivers
Informational	Proactive voluntary communication	Industry-leading	Transparency Reputation among investors and capital providers	Prioritize investment with AMB
Regulatory	Develop best-in-class buildings Collect data on energy performance Collect data on energy performance	Industry-leading	Reputation among regulators and customers	Better rents, higher tenant retention
Legislative	Proactively work with customers to reduce emissions Work with policymakers	Industry-competitive	Industry and company perception	Carbon emission management and reductions
Energy and Resource	Develop sustainable buildings Retrofit to improve efficiency	Industry-leading	Higher-quality property Responsiveness to customers’ needs	Rent premiums Higher asset value Tenant retention
Procurement	Contractor relationships National vendor accounts	Industry-competitive	Reputation for successful project delivery	Maintain schedule and budget
Climate Change	Disaster preparedness plans Development standards	Industry-leading	Industry and company perception Align efforts with our customers	Reduce risk of loss and business interruption

By proactively addressing these potential risks, we can minimize our financial risks and maximize long-term value. At a minimum, our efforts are likely to reduce the financial impact of new regulations and allow us to undertake new projects more successfully. We may benefit from higher income and lower vacancy within our operating portfolio. We may also see preference from investors due to our proactive approach in dealing with risks and uncertainty that could impact our business. AMB remains focused on business practices that create long-term shareholder value while reducing the impact of our activities on the environment and the community.

Our objectives for implementing immediate and long-term actions to address the risk categories described above are as follows:

Objectives	Performance Relative to Objectives
Continue infill-focused investment	Prudent and focused capital deployment strategy
Implement sustainable building standards on development projects	Created global best practice standards to guide development activities Announced commitment to develop in accordance with LEED standards on U.S. developments; 7 LEED-registered projects in 2008; more than 5 million square feet of projects in development are expected to comply with recognized rating standards AMB Morgan Business Center Building 100 received LEED-CS Gold certification. Working to ensure Japan projects comply with CASBEE rating system AMB TriPoint Business Park, LEED-registered and recognized as “Redevelopment Project of the Year” by the San Jose Business Journal Continued build-out of master-planned AMB Fokker Logistics Park with sustainable features
Audit operating properties for energy conservation retrofits and communicate savings opportunities to occupants	Promote retrofit assessments during current economic period National relationships established with service providers and product suppliers 3.5 million square feet of energy conservation retrofits completed within operating portfolio
Communicate with and educate regulators & community about sustainable activities	Ongoing for many projects AMB TriPoint Business Park redevelopment recognized by the mayor of San Jose as a leading example of sustainable redevelopment that supports the city’s own sustainability mission
Continue to explore water conservation opportunities, focused on properties in water-constrained locations	Pilot water conservation projects undertaken in southern California to evaluate new technologies Drought-tolerant and landscaping incorporated into development specifications Water-efficient low-flow and water-free plumbing fixtures incorporated into development specifications
Expand current disaster preparedness plans	Disaster preparedness plans have been implemented
Continue charitable activities through financial contributions and employee volunteer efforts	AMB and its employees contributed more than $360,000 to charitable organizations in 2008, in addition to thousands of hours of volunteer activity
Continue to refine corporate governance practices when appropriate	Industry-leading governance procedures currently in place
Increase transparency on sustainability and governance topics for investors and capital providers	Responded to investor environmental and social governance questionnaires Launched sustainability resources on wesbite
Increase education and communication of corporate social responsibility strategy via online resources	Web-based projects in development Scheduled for 2009 release
Identify carbon emissions footprint	Analyzed carbon emissions from Scope 1 and Scope 2 business activities Began tracking annual emissions data

Primary responsibility for these efforts falls under the Development, Environmental and Risk Management Services group within AMB. This group provides reports to the Board of Directors when requested. Responsibility for charitable activities is held by AMB’s Charitable Activities Committee and by officers in each region.